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TMI Blog2020 (5) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... has deposited Rs. 25,000/- towards statutory deposit. The learned counsel appearing on behalf of the insurance company fairly submitted that the entire balance amount including interest and cost will be deposited by the insurance company and that he has instructions to state so before this court. Recording the said submission, the Insurer is hereby directed to deposit the entire award with interest and costs less statutory deposit within 2 weeks of receipt of this order by email. It is pertinent to note that despite the grant of interest @ 9% p.a., the Insurer and its Counsel have gracefully not made an issue of it. However, it is made clear that the affirmation of the award with interest at 9% p.a. shall not be treated as a precedent, since the ordinary rate of interest is 7.5% p.a. only. 2. The learned counsel for the appellant insurance company submitted that under normal circumstances, he would have withdrawn this appeal. However he was compelled to bring to the notice of this Court, a vexed issue which has its origins in an Insertion by Finance Act, 2003 W.E.F. 01.06.2003 to Sec. 194 A of Income Tax Act, 1961. The learned counsel pointed out that while satisfying this award i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und appropriate. 6. Fundamentally, this Court is now convinced that the germination of the TDS issue in this jurisdiction is traceable to "delayed compensation" under the erstwhile Land Acquisition dispensation. TDS was applied on the interest paid to the Landholders in the course of acquisition. Picking up from this idea, the Income Tax Department in Chennai had sent a notice to National Insurance Co. Ltd., a Public Sector Insurer, asking for details of satisfaction of awards with interest liability, over a long period. On advice, the said Insurer challenged the notice by way of W.P. No. 7480/1999. Since clearance was necessary from the Central Government for a PSU Insurer to challenge the orders of a statutory department, there was delay in disposal of the Writ Petition. In the meanwhile, aware of this challenge, Central Government deemed it proper to amend 194 A of Income Tax Act, 1961 to specifically provide for TDS in relation to interest liability of over Rs. 50,000/-. 7. Hence, on and from the date of said amendment, TDS is being applied Pan India. In so far as Tamil Nadu is concerned, TDS was being applied as a matter of course wherever applicable. However, a victim in Er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refunds are not made to the poor victims, the issue is exacerbated. Following these difficulties for the innocent motor accident victims, a few High Courts have ruled that Sec 194 A was not applicable in these claims. They appear to have done so after due notice and hearing the Income Tax Department. 10. While so, this Court in MD, TNSTC Vs. Chinnadurai, dated 02-06-2016, reported in 2017 ACJ 505 ruled that TDS in Motor accident claims was inapplicable. It followed the example set by a few other High Courts such as Himachal Pradesh, and gave primacy to Motor Vehicles Act, 1988 as a social welfare legislation to Income Tax Act, 1961 as a Revenue legislation. By this verdict, it was held that the interest liability was also not exigible to TDS despite the amended Sec 194 A. It is pertinent to note that in Chinnadurai case this Court did not have the benefit of hearing the Income Tax Department, which has vital interest in the issue. More importantly, the earlier decision of this Court in New India Assurance Vs. Mani in CRP No. 2628/2003 dated 07-07-2004 appears to have been brought to the notice of this Court and the same is evident from Para 18 of the judgement. In spite of the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in sofar as Tamil Nadu is concerned. 15. Further, the Counsel have made a submission that in view of the apparent conflict between the decisions in Mani and Chinnadurai, several execution petitions are filed and orders are pending before Claims Tribunals. There are also CRPs pending. The Counsel are unable to lay their hands on more of them considering the lockdown times. Hence, it is their sincere submission, while a reference may be made to a larger bench for resolution of the apparent conflict between the decisions in Mani and Chinnadurai, this Court may consider keeping in abeyance all pending Execution Petitions at whatever stage, and even where orders have been passed, in so far as the TDS issue is concerned, until a firm and clear decision is obtained from a larger bench. 16. Going by the above discussion and the obvious and apparent disagreement between two learned single judges on the issue and unnecessary pendency of EPs and CRPs and difficulties faced by all the stakeholders, I am more than satisfied that it is a fit case to order a blanket stay of all Execution Petitions pending before all Motor Accident Claims Tribunals in Tamil Nadu in relation to and confined to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed before the Hon'ble Chief Justice so that the same can be tagged while referring to the larger bench. 20. In the meanwhile, the Appellant Insurance Company is directed to satisfy the award in MCOP No. 79/2018, on the file of Motor Accident Claims Tribunal / Special Sub Court, Krishnagiri together with interest and costs less Rs. 25,000/- already deposited, within 2 weeks from the date of order in this proceedings by email. 21. In view of the peculiar circumstances of the disposal of this appeal and a reference being made on the TDS issue, the insurance company is hereby directed to deposit the entire award sum of Rs. 10,46,200/- with interest at 9% p.a. from 21-11-2016 with cost of Rs. 27,332/- and without applying any Tax Deduction at Source (TDS), in so far as this award is concerned, without setting a precedent. The insurance company has readily agreed to do so, in compliance with the orders of this court. 22. On such deposit by the insurance company, the entire award sum with interest and costs without applying TDS also, the claimant would be at liberty to withdraw the same, upon identification by the Counsel for petitioner, as per the practice before the said claims ..... X X X X Extracts X X X X X X X X Extracts X X X X
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